Question

Calculate value of closing stock from the following:

Opening stock of finished goods (500 units) : Rs. 2,000

Cost of production (10000 units) : Rs. 50,000 Closing stock (1000 units):?

(a) Rs. 4,000

(b) Rs. 4,500

(c) Rs. 5,000

(d) Rs. 6,000

Answer 1

Answer:

c

Explanation:

5000 as per fifo method

sales = 9500 units

50000*1000/10000

hence inr 5000

Answer 2

Given:

Opening stock of finished goods (500 units) : Rs2,000 Cost of production (10000 units) : Rs50,000

To Find:

Calculate the value of closing stock

(a) Rs. 4,000

(b) Rs. 4,500

(c) Rs. 5,000

(d) Rs. 6,000

Solution:

Closing stock = 2000 units

we are following the method of first in first out, in this question opening stock is 500 units and production in the current year is 10000 units, so we will assume that 500 units have been sold and 1000 units in the closing stock is from the goods produced in the current year.

Particulars                Quantity                 Rate                       Amount

1) opening                  500                         4                            Rs2000

2) production            10000                      5                            Rs50000

Value of closing stock= 1000*5

                                      =Rs 5000

Hence, the correct option is (c).